Morgan Sindall cancels dividend

Aaron Morby 2 months ago
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Morgan Sindall has become the first stock market-listed contractor to suspend dividends to shareholders.

The contractor, which announced strong annual results last month, said it expected the coronavirus crisis to have a material impact on this year’s profits.

It reported this morning that certain construction sites had already closed under instruction from its clients and this was expected to increase across a number of divisions and activities.

Also activity on other sites and projects was slowing while progress with some development schemes in the regeneration activities had become more uncertain.

John Morgan, Chief Executive, said: “These are clearly challenging times and we continue to take the appropriate action to mitigate the impact of Covid-19.

“The group remains well funded, with good cash liquidity and an order book of £7.6bn, underpinning our confidence in the group’s long-term prospects.”

For the current financial year, average daily net cash to 20 March was £132m.

Morgan said the group had committed bank facilities of £180m and as a precautionary measure, it had drawn on these facilities in full to provide control over its own cash resources.

He added that the board could consider paying a second interim dividend in lieu of the cancelled final dividend once there is greater visibility on the impact of COVID-19 on the group’s businesses and the economy as a whole.

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